An example of a sales-related factor that would increase inherent risk would be ________.
A)significant legal compliance issues when making sales
B)a history of complying with all laws and regulations
C)strong oversight of management by the board of directors
D)revenue recognition is relatively straightforward, with no significant accounting issue

Question

Quizplus · Accepted Answer

Significant legal compliance issues can increase the risk of errors or fraud in sales transactions, thus increasing the inherent risk in auditing the sales cycle.

An Example of a Sales-Related Factor That Would Increase Inherent